Choice in International Contexts

1. Choice in International Contexts Eric Bettinger Stanford University School of Education 10 may 2010

2. School Choice and Vouchers Abroad • School Choice Takes Many Forms Abroad • Educational Vouchers • Contract Schools • Open Enrollment • Privately Financed Initiatives • Vouchers are More Integral to Many Educational Systems Abroad Than to the US • National Voucher Systems in Chile, Sweden • Targeted Voucher Programs • Means-Tested: Puerto Rico, Colombia • Women: Bangladesh • International Literature is still in its infancy in many ways

3. International Evidence and the US • Design of School Systems • Limits to Generalizeability • Political Circumstances • Institutions • Funding Schemes • Role of Private Sector • Motivation for Voucher Systems • Market Forces • Equality of Opportunity • Overcrowding • Decentralization

4. Why Look Internationally? • Most Voucher Literature is From the US • International programs are much larger than in the US • Chile, Bangladesh, Colombia • Long-run Equilibrium? • Chile’s voucher program is now almost 30 years old • Existing funding systems and institutions may make vouchers more feasible • Many previous reviews: Neal (2002), West (1996), Zimmer and Bettinger (2008), Wößmann (2007)

5. Plan of Talk • Discuss Major Research Questions in Int’l Voucher Literature • Major Voucher Programs • Chile • Colombia • Effects of Vouchers on Voucher Users • Effects of Vouchers on Overall System

6. Key Research Questions • How do Vouchers Affect Students Who Use Them? • Academic Outcomes • Non-Academic Outcomes • Heterogeneous Outcomes • Cost Effectiveness • Mechanisms? • How do Vouchers Affect the System as a Whole? • School Entry and Exit • Overall Attainment and Outcomes • School Staffing • Competition and Resource Loss

7. Why Study Voucher Users? • Policy relevance • Motivation for many policies • Part of knowing overall impact of system • Depends on size of system • Sheds light on other educational questions • Effect of private schools • Peer groups • School Organization • Cost Effectiveness

8. Overall Impact of the Voucher • Efficiency of Overall System • Friedman (1955) • Tiebout Competition (1956) • Alternative Explanations • Resource Loss • Limits on Competition • Sorting

9. International Voucher Programs Bangladesh Belize Canada Chile Colombia Guatemala Japan Lesotho The Netherlands New Zealand Poland Puerto Rico Sweden United Kingdom

10. Chilean Voucher Program • Part of Larger Decentralization Effort by Pinochet Government in 1980 • All students were eligible • Starting in 2008, “bonus” subsidy for admitting low-income student • Increase in Private Schooling • 15% in 1981 to 42 percent in 2005 • Public, Voucher, and Private Non-Voucher • “Topping Off” Allowed in 1993 • Selective Admission Policies in Voucher Schools

11. Attendance Across Sectors in Chile Source: Bravo, Mukhopadhyay, and Todd (2009)

12. Colombia Voucher Program • From 1992 to 1997, Decentralization Effort by Colombian Government • Goal to Improve Secondary School Enrollment • Means-Tested • Focus on Students Entering Secondary School (Grade 6) • Students Coming From Public Sector • Covered About 144,000 Students • Admissions • Students had to be admitted at a voucher school prior to voucher application • Vouchers assigned by lottery if oversubscribed • Voucher Value • Declined over time from 100 to 50 percent

13. Enrollment Rates in Colombia, 1993 Source: Sanchez and Mendes, 1995

14. Effect on Users • Not clear what to expect • Imagine that the voucher at least does no harm • Parents can always reverse decision • However, “original” school may be altered by voucher program • Raw correlations • Colombia: voucher schools have similar outcomes to public schools (King et al 1997) • Chile: comparisons depend on types of covariates included (McEwan and Carnoy 2000) • Cleanest evidence to date is from Colombia • Uses randomization to identify the voucher

15. Evidence from Colombia • Angrist, Bettinger, Bloom, King, Kremer (AER 2002) • Surveyed Voucher Applicants from Bogotá 1995 Lottery • Compared Voucher Lottery Winners and Losers • Effects after Three Years • Angrist, Bettinger, and Kremer (AER 2006) • Administrative Data on All Applicants • Compared College Entrance Exam Scores

16. Effects on Users: Colombia • Effects after 3 Years • Increased Usage of Private Schools • Higher Educational Attainment • No Difference in Drop-out Rates • Less Grade Repetition • Higher Test Scores • Less Incidence of Teen-age Employment • Long-Run Effects • 30 percent of Voucher Applicants Take College Entrance Exam • Increase of 7 percentage points for Voucher Winners • 25 Percent Relative Effect • Impact on Test Scores

17. Users: Evidence from Chile • Hard to Interpret • Counterfactual hard to identify • New private schools and rapid entry into the market • Were “control” students affected • Conclusion depends on Covariates • Some Evidence of Positive Effects on Users (e.g. Sappelli and Vial 2002) • Evidence is Largely Mixed as to Whether Vouchers Improve Outcomes (McEwan and Carnoy 2000)

18. Evidence on Users: Mechanisms • Randomization facilitates identification of “intent to treat” parameter in Colombia • Does not help identify specific mechanisms • Possible mechanisms • Private schools are better • But school quality was the same (King et al 1997) • Peers are better • Bettinger, Kremer, and Saavedra (2008) examine vocational school applicants • Winners “stuck” in vocational schools – peers are worse • Winners outcomes are better despite worse peers • Voucher included incentives • Students lost voucher if they failed. • Alternative was labor force participation

19. Effect on Overall System • Competing Hypotheses • Competition • Resource Loss • Loss of money from enrollment depends on average versus marginal cost • Marginal cost of leavers is likely lower than average cost • Inability to close public schools in Chile • Raw Correlation • Positive relationship between degree of private competition and outcomes (Wößmann 2009) • Lack of pre-program data for Chile

20. Evidence on System: Chile • Hsieh and Urquiola (2006) • Difference-in-Differences approach • Compare areas with significant increase in private school to those without • Average test scores do not rise • Vouchers resort peers. Best students move to private voucher schools. • Some outcomes (e.g. grade repetition) are worse • Gallego (2005, 2007) • Instrumental Variable approach • Uses stock of Catholic priests in 1980 as instrument • Immediate expansion of parochial schools led overall outcomes of all schools to improve

21. Evidence on System: Chile • Bravo, Mukhopadyay, and Todd (2009) • Life-cycle model of earnings and schooling decisions • Use labor force data for individuals educated before and after the voucher reform • Estimate impact of choosing private school • Simulate what educational attainment would have been in absence of the program. • Positive impacts on educational attainment, high school graduation, college attendance and graduation, and wages

22. Evidence on Systemic Effects: Other Countries • Sweden • Comparisons based on penetration of private sector • Sandstrom and Bergstrom (2005): Positive effects on overall system • Value-added comparisons • Ahlin (2003): Positive effects on overall system • Israel • Open enrollment => Positive Effects Lavy (2006) • UK • Relationship between degree of choice and outcomes (Gibbons, Machin, and Silva 2008) • Small, positive effects.

23. Evidence on Systemic Effects: India Experiment • Kremer and Muralidharan experiment • Sample of communities who “might be eligible for voucher study” • Gathered applications • Matched randomization on which communities received voucher • Comparisons between non-applicants across voucher and non-voucher cities • Within communities with vouchers, lotteries determine voucher assignment • Differences across users • Preliminary results positive on both accounts

24. Future Directions • Other Outcomes • Parents choose schools for non-academic reasons • How do these outcomes vary? • Wage impacts • Bravo et al (2009) is first study to explore • Cost Effectiveness • Few studies so far • Public expenditure on vouchers generally smaller • Mechanisms • Staffing issues

25. Summary • International Voucher Literature in Infancy • Significant contributions in last few years • Effects on Users • Positive Effects from Colombia • Not clear on the mechanisms and the importance of the voucher for the effects • Chilean evidence is hard to interpret • Growing consensus of positive effects • Effects on System • Positive Effects in Chile • Comparisons of areas with and without voucher penetration • More evidence arriving soon